Equity funds, broadly defined to include both stock
funds and Mixed-Equity or ‘hybrid’ funds, enjoyed an
inflow of only $8 billion, 1/3 of June’s inflow pace (see
Lipper: Equity Funds See Inflows in June
). The Lipper report suggested that this may be a signal
of a fundamental paradigm shift in investor thinking.
Investors, the report stated, while at some level
understanding of the need for asset acquisition in the
long run, are apparently unwilling to take more than
minimal perceived risk in the short term. The Lipper
report suggests that this trend may continue for “some
more months.”

Fixed income funds, on the other hand, saw an
outflow of $1.5 billion. However, this is the best
net-flows month since March. Lipper attributes this
mitigation of net outflow to an upturn in bond prices as
well as a broad disaffection with stocks and stock
funds.

Money markets saw their third-best net-flow results
in the last 12 months, with only $8.4 billion in outflow
seen for the month of July. There was, according to the
Lipper study, an even split between institutional and
retail classes. “About all that can currently be said
with some assurance is that the pressure on money fund
balances coming as a result of low interest rates has
abated,” the report stated. “Those who were inclined to
move elsewhere presumably have largely done so.”

The Lipper report concluded that although returns
were slightly negative for the month of July, activity
was light and net flow in specific fund types was small
by historical standards.